Small Business Finance News
San Francisco Business Leaders Split On New Tax Proposals
Written by Jenna Weiner
Published: 6/30/2010
A new proposal for San Francisco small businesses would institute a rent tax to pay for lower payroll taxes.
A proposal to modify San Francisco's payroll tax and replace it with a new commercial rent tax is drawing both criticism and praise from various small business supporters in the city.
The proposal would reduce the city's 1.5 percent payroll tax to 1.3 percent for workers making less than $85,000 per year, and give companies a $1,500 tax credit. Those reductions would be counteracted by a new rent tax - which exempts lower-revenue landlords and companies with less than $250,000 in payrolls.
Board of Supervisors President David Chiu says that the new tax structure is more fair, because it spreads the tax burden out to other companies - such as banks and insurance companies - which had been exempt from the business tax.
A report from the City Controller's office said that the proposal would eventually make it cheaper for companies to bring in additional workers. It would also increase commercial rent costs - bad news for small business owners in a city with already high rents.
The proposal is one of many new tax proposals - worth a potential $100 million - likely to be included on a November ballot. The San Francisco Chronicle says that voters will also cast their votes on proposed hotel and parking tax increases.
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